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" ... McCoy: First, taxing authorities can come after the company saying it should have treated the worker as an employee and withheld payroll taxes. So, the company can owe the tax, penalties for failing to pay the tax promptly, and interest. The lawsuits we discussed are a second angle of attack, alleging that misclassified workers are owed backwages because they didn’t get paid for overtime, and expenses, such as the upkeep for their cars if they’re drivers or the cost of equipment that they wouldn’t have had to pay for if they were employees. And, if it’s determined that a worker was actually an employee, there’s a house of cards effect: they should have been classified as an employee not just for tax and wage purposes, but also for benefits, such as health insurance, life insurance, 401k eligibility, and equity in the company. So, if a company has historically given stock options to all of its W2 employees, but not to its contractors, and it’s then determined that some of these contractors were misclassified, they would have an argument—not a slam dunk, but an argument—that they should have received equity when they started working for the company. ... "